FORBES: If GM Collapses, Don't Blame The Union

[LSK]

Yes from Forbes magazine, go find a freeper and stick this in their face:

Unionized autoworkers are a favorite scapegoat for the problems facing U.S. automakers. Their job security guarantees and gold-plated benefits have surely cost General Motors, Ford Motor and Chrysler a bundle over the past few decades. Indeed, the domestics' historically high labor costs are among the reasons they haven't been able to compete with Japanese rivals, and why Detroit CEOs were back on Capitol Hill again Thursday asking for $34 billion in taxpayer loans to survive.

But the U.S. automakers probably would have collapsed by now if not for the concessions made by the United Auto Workers union over the past three years.

snip

The union has made some major concessions. Two biggies last year: The UAW agreed to cap the cost of retiree health care through creation of an independent trust fund and agreed to cut wages in half, to $14 an hour, for new hires in non-assembly jobs (20% of the workforce). More concessions came this week when the union agreed to end a controversial "jobs bank" program, which pays workers even when there are no vehicles to build. The union also said it would allow car makers to extend their scheduled payments to the health care trust fund. Importantly, UAW President Ronald Gettelfinger also said the union is ready to renegotiate additional contract terms.

Detroit's current average labor cost is about $71 per hour, compared to $47 an hour at Toyota, which has no unions. But it's misleading to suggest that Detroit autoworkers are paid $71 an hour. About $17 of that is the cost of health care insurance for retirees. General Motors (nyse: GM - news - people ) has 442,000 retirees in North America, four times as many current employees. Toyota has only 371 retirees in the U.S.; Honda has 2,400.

What do autoworkers really make? Detroit's hourly workers earn $28 an hour, or $57,000 a year. (Toyota workers make $25.) Benefits and payroll taxes bring the total cost per worker up to $54 an hour, versus $47 at Toyota. Under a breakthrough labor contract in 2007, new hires in non-assembly jobs will be paid only $14 an hour and will receive less generous benefits, which will narrow that remaining gap considerably.

http://www.forbes.com/home/2008/12/04/detroit-labor-uaw-biz-manufacturing-cz_jm_1205union.html

[Bozita]

1. That's MUST READ stuff!

[mrreowwr_kittty]

2. K and R. nt

[KamaAina]

3. Meanwhile, it snowed in New Orleans yesterday

can the Apocalypse be far behind? :scared:

[JuniperLea]

4. We cannot compete with any country with socialized medicine...

And we cannot compete with any company that doesn't have our greedy bastard good old boy corporate leadership with multi-million dollar salaries, on top of multi-million dollar bonuses, and if you fire them, they have multi-million dollar golden parachutes. They can't lose, so we have to.

[bvar22]

19. I agree.

LABOR Unions were killed in 1993 with the passage of NAFTA and subsequent "Free Tade" agreements.
The argument in the Senate is not whether to "save" unions, but whether to pull the plug on the Life Support.

If you want to assign responsibility for the death of Organized Labor and a healthy American Working Class,, look to 1993.

[JuniperLea]

20. Don't forget Reagan vs. Air Traffic Controllers

That stunt weakened all unions if you ask me.

[Mike 03]

5. This amazes me, because Forbes has traditionally not been very kind to labor or Dems in general.

Good for them!!!!!!!!!!!!!

And they are right.

[nadinbrzezinski]

7. They smell the depression and fear it

our southern senators, no so much

[underpants]

6. I knew the part about the $71 not being right

but I SHOULD HAVE known about the massive difference in the number of retirees

Of course I would assume that a lot of the US retirees of Toyota and Honda are partially or completely in 401K's not the old standard retirement

That being said the problem the Detroit Three have ran into (as well as Bethlehem Steel and others) is that they didn't establish their pension to be handled by trustees. Of course the problem that they and others CREATED is that the politicians they own allowed them to keep the pension on the balance sheet (so to speak) and even dip into it as needed.

The Detroit Three's problem are and have been on the top floors.

[proud patriot]

8. kick a roo

:kick:

[lapfog_1]

9. FORBES!!!

Holy shit! Who knew.

I'm strapping on my ice skates now and planing to meet up with the Devil for a hockey game.

[LSK]

11. is this the 1st time Forbes was ever linked here?

:rofl: :rofl:

[lapfog_1]

16. First time that I can remember that they ever

a) told the truth about labor unions

and

b) took the side of labor unions over "capitalists"

Probably helps that GM management wants to get the union side of things out there.

And Forbes is much more aligned with the North East rich bastard power establishment, rather than the fundie wing nut southern repukes. Perhaps this is a sign of things to come.

[ColbertWatcher]

10. k+r, n/t

[supernova]

12. Thanks for this!

KnR

[newtothegame]

13. Is that $28/hr, or $57,000 a year BEFORE BENEFITS?

Because while I agree with most of the article, I would love to be making nearly $60,000 without a degree. I have two masters and am not making $60,000.

[Zodiak]

18. I have a Ph.D. and make less, as well

But the difference is that I do not care that someone makes more than me. Watch that resentment because resentment is exactly what the pukes want to drum up on this issue so they can break our backs.

The fact is, masters' degree, Ph.D., or union job....none of it means shit because NONE of us are the ruling class. Direct your resentment there where it needs to be.

[safeinOhio]

21. I had a degree and retired from Ford

I also knew people with advanced degrees that worked there on the line because they wanted to make a better living. I have no problem with that. Then again, I also know of multi-millionaires with eight grade educations. I know a third grade teacher that makes over $70,000.00/year, working nine months. We are owed nothing for our knowledge, only for how we use it. (damn, sounds like a bumper sticker)

[retread]

22. Are you implying no one without a degree should be making 60K? n/t

[mopinko]

23. and do you risk your life every day at work? expect to work until you are

in your 50's, because you are likely to be disabled by then?
just sayin'.
one of the reasons the retirees health care is so high is that so many are disabled by work related injuries, and retire on disability.

i think you should get paid a living wage, a family wage, even. but you sound jealous. not good.

[Ikonoklast]

24. Whose fault is that? Theirs, or yours?

I know plenty of people with no higher education that earn waaaaay more than auto workers.

Since when does a piece of paper guarantee an income? I don't have one, and I make way more than an average auto worker.

[NoGOPZone]

14. Even Forbes can't ignore the reality

Workers are supposed to produce cars. Executives are supposed to produce profits. Detroit made a lot of cars this year, but no profits. It's obvious which side isn't doing their job.

[LSK]

15. simply put and well said

[newscott]

17. I say they should all go out on strike and FORCE the issue!

[DeepModem Mom]

25. K&R

[Dover]

26. Hey, here's an idea. Instead of lowering the wages/benefits of American workers

to compete with the nearly non-existent wages and benefits in China and third world countries,
why not raise the standards across the board...er...the globe? It should have been a precondition
of NAFTA and other global trade rules from the get-go.
Then the incentive to ship jobs overseas evaporates.

Of course the current economic collapse may have the effect of making a dent in this problem by default. But you get my drift.

[medeak]

27. Toyota CEO made $903,000

Nardelli was paid $124 million when he was CEO of Home Depot, and was paid $210 million in severance pay when they dumped him. He now runs Chrysler.



The CEO of Ford earned $21 million last year, the GM CEO earned $14.4 million. I don't know if those figures include their bonuses or other compensation (how to factor in the use of a luxury private jet....). Makes the Toyota CEO's pay look paltry.



Chrysler doesn't have to disclose the CEO's pay so it's hard to find out what he's paid.

[file83]

28. Goes to show, the Japanese build better cars and better corporate structure.

They design their corporations in realistic, healthy ways. Paying the CEO that amount means more profits can be put BACK INTO the corporation, labor wages & benefits, research & development (Prius anyone?), etc.

The result are better cars. When ever I see an ugly, old tech American car, I think to myself,"Wow, the design team obviously had a small budget."

[leftofthedial]

29. If the US had modern healthcare, those costs would even out further.

But don't expect even the occasionally honest capitalist to point that out.